Category Archives: Analysis

Key Estate Planning Considerations for Individuals with IP (Part II: Trademarks)

Key Estate Planning Considerations for Individuals with Intellectual Property (Part II: Trademarks)

This is the second entry in a three-part blog series about the interaction between estates law and intellectual property law. Part I introduced Ontario’s succession law regime, and provided an analysis of estates law vis-à-vis copyright law. Part II will apply this analysis to trademark law. Finally, Part III will examine this area in relation to patent law, as well as provide some concluding thoughts and considerations.

Trademarks

In the previous blog entry in this series, we looked at Ontario’s succession law regime. We also applied this regime to the provisions in the Copyright Act that related to the assignment of one’s copyright after their death. This week, we will take the same approach and apply it to trademark law, which definitely has some considerations that distinguish it from copyright law.

A trademark is a combination of letters, words, sounds or designs that distinguishes one company’s good or services from those of others in the marketplace. A trademark is mostly a business-related form of intellectual property, as it often signifies a company’s goods, services, reputation and brand.

A trademark can be registered in the name of an individual, or in the name of a corporation. As opposed to copyrights, which are more related to works of art and entertainment, trademarks pertain to the operation of a business. As such, it may make more sense for a variety of reasons, including from an estate planning perspective, to register a trademark in the name of a corporation. In doing so, a testator could transfer the shares of that corporation to a beneficiary, and that beneficiary would in effect own the trademark because they control the corporation that is the registered owner of said trademark.

The Trademarks Act is the key piece of legislation in this respect, and it contains multiple provisions relevant for the purposes of estate planning. The first is Subsection 48(1), which allows for the transfer of trademarks, whether registered (in which case CIPO requires a fee  of $100) or unregistered. On that note, as with copyrights, trademarks also do not need to be registered. By the same token, registration of a trademark is prudent, as registering a trademark help more effectively enforce trademark rights against third parties.

Unlike copyrights, however, the ownership of a trademark is not subject to the same types of term limitations. As per Subsection 46(1) of the Trademarks Act, the registration of a trademark is valid for an initial period of 10 years, and can be renewed for any number of subsequent 10-year periods as long as the owner pays the renewal fee ($400 for the first class of goods or services to which the request for renewal relates, and $125 for each additional class). However, the registration must occur within six months after the expiry of the initial or renewal period (although there are certain avenues for extending this timeline).

All that being said, individuals planning their estates should be weary of the common law rule against the partial assignment of trademarks. The Exchequer Court of Canada held in Great Atlantic & Pacific Tea Co. v. Canada (1945), [1945] Ex CR 233, 5 CPR 57 that if a person owns a registered trademark for use in Canada in association with certain goods, they cannot validly assign the trademark unless they also assign the whole of the goodwill of the business carried on by them in Canada in association with such wares. As such, an individual should avoid assigning a trademark to one beneficiary and the business with which said trademark is associated to a different beneficiary.

This principle only further supports the notion that registering a trademark in the name of a corporation and then gifting the shares of a corporation to a beneficiary is an effective way of managing a trademark for the purposes of estate planning. Trademark assignment can be a complicated legal area, so it is best for a testator not to separate the trademark from the business with which it is associated.

Key Estate Planning Considerations for Individuals with IP (Part I: Introduction & Copyrights)

This is the first entry in a three-part blog series about the interaction between estates law and intellectual property law. Part I will introduce Ontario’s succession law regime, and provide an analysis of succession law vis-à-vis copyright law. Part II will apply this analysis to trademark law. Finally, Part III will examine this area in relation to patent law, as well as provide some concluding thoughts and considerations.

In the world of will-making, when we think about how the assets of the will-maker (usually referred to as the “testator”) are going to be distributed, we often think about what’s going to happen to their real estate, their vehicles, their jewellery or their other personal belongings. While it is natural for us to first turn our mind to property that is physical or tangible, it is important to ensure that we turn our focus to intangible property as well, as such property often requires more attention and direction.

One form of property that undoubtedly fits this definition is intellectual property. In making provision for one’s friends and family in their will, it is important to consider the financial and sociocultural impact of any intellectual property they may own, and manage such property accordingly. In this blog post, we will go over some key legal considerations, under Ontario and federal law, for the transfer of copyrights, trademarks and patents upon an individual’s death.

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A Recent Look at Interlocutory Injunctions in Trademark Infringement Cases

Interlocutory injunctions remain difficult to obtain in trademark infringement cases. To obtain an interlocutory injunction, the moving party must satisfy a three-part test. A party must show that:  (1) a serious issue has been raised; (2) irreparable harm will result if the injunction is not granted; and (3) the balance of convenience favours the moving party. Over the years parties seeking injunctive relief in trademark infringement cases have faced difficulty satisfying the irreparable harm branch of the test. In order to satisfy the court that irreparable harm will result, the court requires clear and non-speculative evidence of harm that could not be compensated for by an award of damages at trial. This has proven to be difficult for parties for among other reasons, the fact that often in these cases it is in fact possible to quantify the harm that has and/or will be done and accordingly compensate the moving party through an award of damages at trial. Canadian courts have recently provided more insight on the evidence required to support a request for injunctive relief.

In the 2017 decision of Sleep Country Canada Inc. v. Sears Canada Inc., 2017 FC 148, Sleep Country Canada Inc. (“Sleep Country”) was granted an interlocutory injunction against Sears Canada Inc. (“Sears”) to prevent Sears from using its slogan: “THERE IS NO REASON TO BUY A MATTRESS ANYWHERE ELSE”, pending the final determination of Sleep Country’s trademark infringement action against Sears. Sleep Country alleged that Sears’ slogan infringed Sleep Country’s trademarked slogan of “WHY BUY A MATTRESS ANYWHERE ELSE”. The court accepted Sleep Country’s arguments and found that on a balance, there was a likelihood of confusion between the time of the motion and the disposition of the infringement action and that this confusion would result in lost sales as a result of consumers being less aware and familiar of the slogan’s association to Sleep Country. The court found that these associations would consequently result in a loss of distinctiveness for the brand of Sleep Country and this would in turn have an effect on the goodwill established by Sleep Country.

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Draft Guidelines Published by the Patented Medicine Prices Review Board

The Patented Medicine Prices Review Board (the “Board”) recently published draft Guidelines to replace the current Compendium of Policies, Guidelines and Procedures, leading up to the coming into force of the amended Patented Medicines Regulations on July 1, 2020. The draft Guidelines are needed to facilitate the implementation of the upcoming changes to the Regulations, including: (i) the additional price regulatory factors for consideration by the Board when assessing whether the price of a patented medicine is excessive; (ii) updates to the schedule of comparator countries to be used by the Board for international price comparisons; and (iii) changes to reporting requirements for patentees. Interested parties can make written submissions to the Board on the draft guidelines during the consultation period, which ends on February 14, 2020.

For a more detailed review of the draft Guidelines, please refer to the Fasken bulletin PMPRB Publishes Draft Guidelines to Operationalize Amendments to the Patented Medicines Regulations authored by Ingrid VanderElst and Mark Vanderveken.

Sights and Smells: a New World of Senses in the Field of Non-traditional Trademarks

Introduction

The revised Trademarks Act came into force on June 17, 2019 and brought new waves of changes to the trademark legal landscape in Canada. The Act is now more harmonized with international practices and standard procedures of trademark law by adhering to international treaties and implementing the International Classification of Goods and Services for the Purposes of the Registration of Marks (Nice classification) and the Madrid Protocol for trademark applications with the World Intellectual Property Association, allowing access to more than 100 jurisdictions worldwide in a single application.

Non-Traditional Trademarks

To align Canadian trademark law with international standards, the revised Act now recognizes new non-traditional trademark signs, such as colours, three-dimensional shapes, holograms, moving images, modes of packaging goods, sounds, scents, tastes, textures and the positioning of a sign. This amendment opens the door for businesses in the Canadian market to let creativity run free and protect innovative forms of marketing.

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